Euro­pean shares fall on weak data, Greece jit­ters

The China Post - - BUSINESS INDEX & -

Shares fell in Europe on Thurs­day, sapped by doubts over the Greek bailout plan and gloomy man­u­fac­tur­ing data from the re­gion.

Ger­many’s DAX fell 1.1 per­cent to 11,739.81 and France’s CAC-40 lost 1 per­cent to 5,161.20. Bri­tain’s FTSE 100 lost 0.2 per­cent to 7,015.15. Wall Street like­wise looked set for a slow start, with Dow and S&P fu­tures both down 0.4 per­cent.

An agree­ment with Greece’s Euro­pean cred­i­tors on ad­di­tional re­forms in ex­change for res­cue money due for the end of April re­mains far off ahead of a meet­ing Fri­day in the Lat­vian cap­i­tal of Riga. The lack of a plan to pro­tect Greece from de­fault­ing and even drop­ping the euro is cloud­ing prospects for its re­cov­ery.

A pre­lim­i­nary sur­vey of fac­tory man­agers showed Eu­ro­zone busi­ness ac­tiv­ity slowed in April from March’s 11-month high, re­flect­ing weaker rates of ex­pan­sion for France and Ger­many de­spite ac­cel­er­at­ing growth else­where in the re­gion.

“U. S. and Euro­pean eq­ui­ties have been see­ing some choppy trade with a bit of un­cer­tainty around earn­ings data and Greece. This is un­likely to change in the near term and could be a de­ter­rent for some in­vestors for the time be­ing,” Stan Shamu, a mar­ket strate­gist for IG, said in a com­men­tary.

Asian Stocks Higher

Asian mar­kets mostly rose, with an­other poor read­ing of Chi­nese man­u­fac­tur­ing lift­ing Shang­hai on hopes for fur­ther stim­u­lus while a weaker yen boosted Ja­panese ex­porters.

Tokyo added 0.27 per­cent, or 53.75 points, to fin­ish at 20,187.65, while Syd­ney rose 0.13 per­cent, or 7.3 points, to close at 5,844.8 and Seoul climbed 1.38 per­cent, or 29.52 points, to 2,173.41.

Hong Kong shares fell 0.38 per­cent fol­low­ing a re­cent rally and a re­port in­di­cat­ing Chi­nese man­u­fac­tur­ing ac­tiv­ity con­tracted in April.

The bench­mark Hang Seng In­dex slipped 106.15 points to 27,827.70. Turnover was HK$191.77 bil­lion (US$24.74 bil­lion). But Shang­hai rose 0.36 per­cent.

HSBC said its pre­lim­i­nary pur­chas­ing man­agers’ in­dex (PMI) of man­u­fac­tur­ing ac­tiv­ity in China had slipped to a 12-month low in April, the lat­est data to show the world’s num­ber two econ­omy slow­ing.

The read­ing of 49.2 is down from the 49.6 seen in March and well be­low the 50 break-even point that sep­a­rates growth from ex­pan­sion.

Hopes for mon­e­tary eas­ing by China have seen Shang­hai’s bench­mark in­dex dou­ble over the past year, while the Hang Seng has surged this month to lev­els not seen since the end of 2007 — helped by an eas­ing of rules for cross-bor­der trad­ing.

“The PMI fig­ure missed ex­pec­ta­tions,” Gerry Al­fonso, a direc­tor at Shen­wan Hongyuan Group Co.’s in­ter­na­tional busi­ness depart­ment in Shang­hai, said.

“Th­ese types of macro fig­ures can be in­ter­preted in dif­fer­ent ways and this will cause volatil­ity.”

Ten­cent fell 1.11 per­cent to HK$160.90, casino op­er­a­tor Sands China slipped 2.45 per­cent to HK$31.80 and Hutchi­son eased 1.58 per­cent to HK$112.30.

But HSBC added 0.50 per­cent to HK$70.80, Hong Kong Ex­change and Clear­ing jumped 0.82 per­cent to HK$296.80 while in­sur­ance gi­ant AIA was up 2.15 per­cent at HK$52.15.

‘Close to the bot­tom’

In main­land China the bench­mark Shang­hai Com­pos­ite In­dex added 0.36 per­cent, or 16.02 points, to 4,414.51 on turnover of 963.0 bil­lion yuan ( US$157.1 bil­lion).

The Shen­zhen Com­pos­ite In­dex, which tracks stocks on China’s sec­ond ex­change, rose 1.01 per­cent, or 22.52 points, to 2,256.98 on turnover of 687.7 bil­lion yuan.

Of­fi­cial data showed that China’s econ­omy growth in the first quar­ter was 7.0 per­cent, its slow­est pace since the depths of the global fi­nan­cial cri­sis six years ago.

In Shang­hai China Uni­com surged by its 10 per­cent daily limit to 8.79 yuan while Datang Tele­com Tech­nol­ogy rose 4.05 per­cent to 28.28 yuan.

Fi­nan­cial stocks re­treated in Shang­hai af­ter a re­cent rally. China Con­struc­tion Bank eased 1.43 per­cent to 6.90 yuan while Citic Se­cu­ri­ties slipped 2.59 per­cent to 36.84 yuan. China Pa­cific In­sur­ance also edged down 1.90 per­cent to 36.21 yuan.

Oil prices were lower, with U.S. bench­mark West Texas In­ter­me­di­ate for June de­liv­ery fall­ing 26 cent to US$55.90 while Brent crude for June eased 31 cents to US$62.42.

Gold fetched US$ 1,189.92 against US$1,199.00 late Wed­nes­day. In other mar­kets: — Welling­ton skid­ded 0.62 per­cent, or 35.71 points, to 5,757.91.

Fletcher Build­ing was down 1.68 per­cent at NZ$8.17 and Spark sank 1.58 per­cent to NZ$6.11.

— Manila gained 0.75 per­cent, or 59.02 points, to 7,892.05.

SM Prime Hold­ings was up 2.83 per­cent at 19.64 pe­sos and Uni­ver­sal Robina closed 0.92 per­cent higher at 219 pe­sos but Metrobank fell 1.77 per­cent to 97.25 pe­sos.

— Jakarta was flat, edg­ing down 0.91 points to 5,436.21.

Lender Bank Rakyat In­done­sia fell 0.95 per­cent to 13,050 ru­piah while palm oil pro­ducer As­tra Agro Les­tari rose 0.11 per­cent to 23,075 ru­piah.

— Kuala Lumpur slipped 0.47 per­cent, or 8.69 1,846.08.

Public Bank lost 0.20 per­cent to 19.58 ring­git, Sime Darby dipped 0.22 per­cent to 9.25 ring­git while May­bank added 0.98 per­cent 9.25 ring­git.

— Sin­ga­pore rose 0.19 per­cent, or 6.51 points, to 3,502.75.

Oversea-Chi­nese Bank­ing Cor­po­ra­tion gained 0.84 per­cent to SG$10.83 and Sin­ga­pore Tele­com rose 0.46 per­cent to SG$4.35.

— Bangkok closed down 0.46 per­cent, or 7.17 points, at 1,552.01.

Su­per­mar­ket chain Big C lost 3.42 per­cent to close at 226.00 baht and Siam Com­mer­cial Bank also dipped 2.03 per­cent, end­ing on 169.00 baht.

— Mumbai fell 0.56 per­cent, or 155.11 points, to 27,735.02.

Sun Phar­ma­ceu­ti­cal In­dus­tries fell 2.55 per­cent to 942.45 ru­pees, while Tata Steel rose five per­cent to 368.70 ru­pees.

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